By Shira Schoenberg, MassLive
Friends of the Homeless runs an overnight shelter for homeless individuals in Springfield and has case managers available during the day. Last year, it got paid $25 per bed per day from a state contract, according to state data. Friends of the Homeless Executive Director Bill Miller said the shelter got an extra $7 per bed from a budget earmark, but it is still struggling to pay basic bills.
Shelters run by ServiceNet in Northampton, Greenfield and Pittsfield got $28 per bed per day.
At the same time, the Pine Street Inn in Boston had state contracts that paid up to $61 per bed per day. A handful of other shelters have contracts paying more than $40.
“There’s no formula,” Miller said. “It is a significant disadvantage to Springfield to be trying to provide adequate services while receiving among the lowest bed rates in the commonwealth.”
The struggle faced by the Springfield shelter highlights a funding process that creates disparities between shelters and appears to have little rationale behind it. Each year, the state spends around $40 million on shelters for homeless individuals. The state funding for the shelters is not competitively bid and has no set formula. There is no process for new shelters to apply for money. Rather, money that was at one time awarded by legislator’s requested earmark has become a permanent line item in the state budget, with the same shelters getting the same contracts year after year, with occasional increases to the lowest paid shelters. Previous legislative attempts to create a standardized bid process failed, although that could change with support from the new administration of Gov. Charlie Baker.
“As the administration works to improve efforts around prevention, addressing Massachusetts’ homelessness crisis requires using our resources as effectively as possible,” said Baker spokesman Billy Pitman. “Governor Baker’s budget proposal introduces an intention to transparently and competitively award, for the first time, individual homelessness services and shelter contracts to better serve a vulnerable population in need and get them back on their feet.”
Joe Finn, executive director of the Massachusetts Housing and Shelter Alliance, a non-profit advocacy group dedicated to ending homelessness, said the budget line item providing the shelter assistance has existed for decades.
“It emerged essentially as emergency programs years ago and rather than going through a formal bidding process, the state was simply negotiating with different communities,” Finn said. “Usually, the state develops specifications, which they entertain bids on. That was never quite done with this.”
The result, Finn said, is a system where an “eclectic mix” of community-based shelters are funded, with no one taking a comprehensive look at what kinds of services each shelter provides, who the shelters accept, and whether the shelters are receiving comparable amounts of money for comparable programs and costs.
“Usually, a rate is based on some kind of logic around what it is the commonwealth wants to purchase. That process has never taken place here,” Finn said.
Paul McMorrow, a spokesman for the Executive Office of Housing and Economic Development, confirmed that the program has not been procured competitively. “The rates had basically been set by earmark in the budget,” McMorrow said. “So lawmakers who were working with advocates who were providing services would put in a request for certain funding to cover their caseload. There was little price transparency and there was not a lot of consistency from provider to provider.”
McMorrow said the department, through Baker’s fiscal year 2016 budget, wants to institute competitive bidding.
This would not be the first time the idea was raised. The 2011 budget passed by the Legislature required the state to develop recommendations to standardize contract rates. In fiscal year 2014, the budget directed then-governor Deval Patrick’s administration to undertake a competitive procurement process “to the extent feasible.”
McMorrow, who was hired by Baker, said Housing and Economic Development officials were advised by Patrick administration officials that a competitive procurement process was not feasible. A reporter was unsuccessful in contacting former housing undersecretary Aaron Gornstein through a housing non-profit where he will become president in June.
Jay Sacchetti, vice president of shelter and housing services for ServiceNet, said ServiceNet’s shelters are all running deficits. Sometimes, they have only one staff member on duty. He is frustrated that the state has no formula to take into account the shelters’ costs. “There is no funding formula. It’s like ‘Here’s what you get,'” he said.
The shelters are vastly different from one another.
Mark Alston-Follansbee, executive director of the Somerville Homeless Coalition, said his shelter is a sober shelter in a church basement with significant staff and support for guests. It was given a contract in 1986, based on its staffing needs, and the contract has continued annually. The contract specifies that the coalition gets $78 a night for eight beds, although the shelter now uses that money to pay for 16 beds. “I have no idea how it was determined,” Alston-Follansbee said.
Alston-Follansbee worries that a competitive bidding process could disadvantage smaller shelters.
The Pine Street Inn in Boston, which has hundreds of shelter beds across three locations, has some of the highest pay under state contracts. A call to the Pine Street Inn was returned by a spokesman for The Coalition of Homeless Individuals, an umbrella group of shelters and homelessness programs. The coalition provided a statement from Karen LaFrazia, executive director of St. Francis House, on behalf of the coalition, which addressed the need for more funding but not the funding disparity between shelters.
“The most significant and urgent issue that all organizations that serve the homeless individual population face is the lack of state funding for providers, and the Coalition is focused on addressing that issue,” LaFrazia said.
With the lack of a solid formula, the shelters are still being funded partially by earmark, requests submitted by individual lawmakers. Last year, Friends of the Homeless brought their rate to $32 per bed through a budget earmark. Western Massachusetts lawmakers are trying to again amend this year’s budget to maintain that rate.
The current process does not allow new shelters to get state contracts without being earmarked. So, for example, Craig’s Doors in Amherst has only been able to get state funding through an earmark. This year, one was introduced by Senate President Stan Rosenberg, D-Amherst. “It’s very precarious,” said executive director Rebekah Wilder. “Shelters able to get into that specific source of funding, they at least have some guarantee of year after year having funding to operate. We’re not part of that.”
The disparity is not entirely regional. Shelters run by the Boston Public Health Commission as well as poor cities like Lawrence, Lynn and Brockton are all getting just $25 per bed per night, the lowest daily rate.
But there are regional implications. Data from the Massachusetts Housing and Shelter Alliance found that in 2013, 45 percent of homeless individuals lived in Boston, Cambridge and Somerville. Those cities received 70 percent of the individual shelter money. In comparision, cities and towns west of Worcester had 13 percent of the individual homeless population and 7 percent of the money. The worst hit were areas south of Boston that had 18 percent of the population but only 6 percent of the money.
“We often hear about the talk of Western Massachusetts getting the short end and eastern Massachusetts getting more resources,” said Sen. Eric Lesser, D-Longmeadow. “This is living proof, factual evidence, of just how broad that funding disparity is. I think it’s very important for us to get parity.”
Lesser is working with Sen. Jim Welch, D-West Springfield, to get Friends of the Homeless more money this year. Long term, both senators say they want to make the funding fairer.
“The funding is so out of whack, whatever formula they are using doesn’t make any sense,” Lesser said. “The potential would be to create a rational formula, because right now, there clearly isn’t one.”
Rosenberg said he does not know exactly what change should be made, but he agrees there should be change. “There are different costs across the state, but the range is way too big,” Rosenberg said. “Many of the places outside of the metropolitan Boston area are simply not getting the rates they need in order to support the programs to serve the people they’re supposed to serve.”